Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500. If you knew the car was reliable, you would be willing to pay $10,000 for it
If you knew the car was unreliable, you would only be willing to pay $5,500 for it. Under what circumstances should you buy the car?
Because of the lemons problem you should buy the car only if the advertisement is placed by a car dealer with a good reputation or by an individual you know well enough to trust, if you can cheaply determine that it isn't a lemon (for example, by an inspection), or if you'll receive a solid warranty against defects.
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Unemployment is good from a social point of view because
A) it keeps wages in check. B) it allows for better matches between workers and firms. C) it provides free time. D) it keeps the least efficient workers out.
During the 1992 presidential campaign, H. Ross Perot made much of the various “special interests” which lobby in Washington, D.C. How might an economist view this? Which specific market breakdown may occur if there is lobbying? Relate your answer to the study of monopoly and oligopoly.
What will be an ideal response?
f the dollar appreciates relative to the Yen, it can be said that
What will be an ideal response?
Recall the Application about the cost of using import restrictions to protect jobs in the lumber industry to answer the following question(s).Recall the Application. Which of the following is true of import restrictions used to protect jobs in the softwood timber industry?
A. Softwood lumber is subject to both import quotas and tariffs. B. These policies protect only a small number of jobs in the industry. C. The cost per job protected is approximately $1 million per year. D. All of these